Slow wage growth has been a concern of the RBA, leading to slower consumption growth and weighing on economic growthSo, the data today is of particular interest.I posted a preview earlier: Australia Q3 Wage Price Index is due Wednesday — preview
The numbers: Q3 Wage Price Index
- expected 0.7% q/q, prior 0.5%
- expected 2.2% y/y, prior 1.9%
preview (this via Westpac)
- Wages have lagged the recovery in the Australian labour market. While it is part of a global phenomenon of wage deflation, there are domestic considerations as well. Rising part-time employment and underemployment have a role to play particularly in Victoria which has the fastest population growth and higher rate of employment growth
- The rise in the national Minimum Wage has an impact in the September quarter Wage Price Index. The RBA has estimated a direct impact of 0.5ppt boost in the quarter due to the increase. Given that the previous Minimum Wage increases contributed 0.3ppt, the net impact of the increase is a 0.2ppt boost to the underlying pace
- Our 0.7%qtr forecast will lift the annual pace to 2.3%yr, the fastest pace since September 2015.